Where the assessee has submitted all the necessary documentary evidence, addition of bogus purchases cannot be made: ITAT Delhi
Facts:
1. The assessee is in the business of manufacturing flour and rice in which maida and Choker (wheat bran) being a necessary ingredients were purchased by the assessee from vendors including one, M/s Raghuveer Singh Devinder Kumar proprietorship concerns of Sh. Devinder Kumar, which was treated as bogus purchases by the Ld AO.
2. Admittedly assessee purchased a total of 400QTl of maida (50Kg Pur.) of Rs. 6,54,200/-, 8,034Qtl of Choker of Rs. 89,63,649/- and 774Qtl of Maida (90 Kg Pur.) of Rs. 12,72,800/- out of which 220Qtl of maida (50Kg Pur.) of Rs. 3.60.800/-, 2,365.5Qtl of Choker of Rs. 26,51,331/- and 391.5Qtl of Maida (90 Kg. Pur) of Rs. 6,43,800 was purchased from M/s Raghuveer Singh Devinder Kumar which was disallowed by Ld. AO.
3. The copy of schedule of details of cost of manufacturing and material which is part of books of accounts indicates that assessee-company has made total purchase of Rs, 23,42,55,055/- which includes the above mentioned purchase disallowed by Ld. AO.
4. The copy of details of purchases of wheat made by assessee during the year indicates the name of party from whom purchase has been made, address of the party, item purchased, quantity purchase and total amount.
5. The ledger account of M/s Raghuveer Sing Devinder Kumar in the books of assessee for the impugned year shows the complete address of M/s Raghuveer Singh Devinder Kumar and further showing that assessee has purchased above mentioned goods from M/s Raghuveer Singh Devinder Kumar for Rs. 5,05,26,292/- for which payment has been made through proper banking channel.
6. Invoices along with the corresponding transport receipt issued by the transporter for transport of such goods have also been submitted.
7. The perusal of the statements of the transporters shows that they have duly acknowledged that the have transported goods to assessee- company. It was further submitted that goods were loaded by supplier in Delhi and were delivered to assessee-company at Syana Road, Bulandshahr. The payment for the said transportation was done by the suppliers and not by the assessee.
ITAT Delhi held as below:
1. On going through the impugned orders we find that complete details of purchases, sales etc., both quantity wise and amount wise was furnished during assessment proceedings as well as at the appellate stage which has not been contradicted by the Ld. AO by any findings alleging that same suffer from any discrepancy so as to rely the oral statements alone for holding purchase to be bogus.
2. AO has primarily doubted the purchases only on basis of transportation of the goods being suspicious. However, the sales are not doubted and the ld. CIT(A) has mentioned the same and thus, only profit element can be taxed.
3. Ld. DR could not dispute the principle that the gross profit embedded in the bogus purchases can be added and not the
The copy of the Appellate is as under:
